Kolmar Korea Q1 2025 Performance: Strategic Growth and Earnings Surprises Across Global Markets

BULLINK Portfolio Format: Earnings Surprises Await for Peak Season

1Q25 Review: Kolmar Korea's Performance Across Key Markets

• Korea, China, and US Surprises:
  • Kolmar Korea reported robust growth beyond market expectations:
    • Revenue: KRW 653.1 billion, reflecting a 14% YoY increase.
    • Operating Profit: KRW 59.9 billion, an impressive 85% YoY jump.

Regional Highlights:

1. Korea:

   • Domestic sales hit KRW 274.3 billion with an 11% YoY rise.
   • Key drivers: Surge in sun care indie brands vs. declining legacy brands.
   • Sun care is anticipated to continue thriving in Q2 peak season.
   • Operating margin soared to 12.4%, marking the strongest Q1 margins.

2. China:

   • Achieved significant sales growth of KRW 41.6 billion (+20% YoY).
   • Operating profit climbed to KRW 3.1 billion (+72% YoY).
   • Recovery from previous year’s sun care order challenges.

3. US:

   • Sales surged by 210% YoY to KRW 21.7 billion.
   • Recorded a positive operating profit: KRW 1.5 billion, with a quarter-on-quarter profit rise.
   • Secured new products and base makeup customers.
   • Profitability maintained with promising margins.

Earnings and Valuation Insights:

• Momentum & Valuation:

  • Driven by strong sun care demand and favorable US market conditions.
  • Domestic margin records anticipated in Q2.
  • Completion of a second US plant in June bolsters onshore production potential.
  • Revised 2025 US revenue guidance from KRW 80 billion to KRW 90 billion.

• Stock Outlook:

  • New price target: KRW 110,000 (up from KRW 92,000), reflecting enhanced estimates and industry valuation multiples.
  • Trading at 14x 12FM PER, indicating affordability.
  • Recommendation: Buy remains in effect, driven by sustained growth and profitability prospects.

Portfolio Implications:

Kolmar Korea’s stellar start to 2025, underpinned by robust performances in Korea, China, and the US, positions it strategically well. With impressive operational metrics and a promising market outlook, Kolmar Korea is primed for investor interest.

Example Application:

An investor considering entry into emerging market cosmetic stocks should eye Kolmar Korea given its operational acumen, market expansion, and strategic capacity enhancements. This aligns with a portfolio seeking growth in the beauty and skincare industry driven by market diversification and product innovation.